Before The Board Meeting, Chop Wood
One of the myths of a high-performance director is that the time you spend in the boardroom is the beginning and end of your role as a director.
We call this "myopic board syndrome': You arrive, drink great coffee (hopefully), attend the meeting and then leave — job done. For any type of director this does not go far enough to honour your responsibility of care, skill and diligence, and, in a private company board, the microscope lens focused on your performance greatly magnifies any lack of preparation.
24/7 Selfless Service
Being a director is a position of 24/7 selfless service. You are required, legally, to put the best interests of the company first and foremost, always, irrespective of whether you are a shareholder. Sometimes, directors must engage directly with stakeholders and the team to demonstrate leadership in a time of crisis.
Just because it happened outside the boardroom does not mean you are not involved or indeed not responsible. After all, responsibility for the quality of your decision-making process lives far beyond the board meeting.
In a private company board, especially in a smaller board, this servant leadership gets put to the test. A big differentiator between a public and private company board is that, in a private company, the board process is embarked upon by choice.
In such cases, usually the founder, chief executive or shareholder-managers understand what a high-performance board can do for company growth and shareholder returns. If you sit as a director on such a board, your performance and contribution become a "locus of focus' and you are expected to deliver tangible value.
A Stitch in Time Saves Nine
One of the best ways that a director can fulfil this responsibility and engage in the board journey proactively is through preparation for the board meeting.
There is limited time in a board meeting and there is always a lot to get done. A director who arrives for a board meeting ill-prepared is one who has already derailed the board from maximising its value.
And, of course, preparation is not a one-way street. Executives are also required to support that preparation with quality board papers circulated to the board with sufficient time to support adequate preparation.
Best practice advises that an absolute minimum of five working days prior to the board meeting is required. In reality, we know this to be one of the greatest challenges, by far, for a private company executive team.
Some of our client executive directors have even submitted their board papers while the meeting was in session. Can you imagine how that would impact board outcomes?
By way of demonstrating, let me share an example with you from our Sirdar Applied Directorship Programme. A core part of the learning journey is the simulated board process, where in each session the pre-allocated teams or boards conduct a board meeting and compete with the other boards for market share and company growth.
When Minutes Impact a Mile
One of the boards in one programme is a habitual non-preparer: Most of the board members arrive without preparing or having only read the papers briefly the night before or on the morning of the meeting.
The impact on board outcomes is massive and blatantly clear. The board members get lost in irrelevant discussions, debates take too long and the key drivers of growth for the company are forgotten as the board keeps rehashing the basics.
After every board meeting you can see the downward spiral of the simulated company's financial performance.
My advice to any director, executive or non-executive, is to invest heavily in your preparation. Sit with those papers and delve into the real challenges that the company faces.
Be exceptionally critical of your own performance as a director and dig deep on how you can add more value in the upcoming board meeting.
Be brave and tackle the glaring obstacles to growth, yet do so with emotional intelligence and a one-team mindset. To adapt a brilliant Zen concept: Before the board meeting, chop wood; after the board meeting, chop wood.